UPDATE 2-EU's Barnier calls for "decisive progress" on Brexit for summit next week

The European Union's Brexit negotiator Michel Barnier on Wednesday called for "decisive progress" in negotiations with Britain in time for a summit of all 28 EU national leaders next week.

Brexit negotiators from both sides have been locked in intense discussions this week, trying to overcome differences on the biggest outstanding hurdle to a Brexit deal - how to keep the Ireland-UK border open after Britain leaves the bloc in March.

Speaking after Barnier briefed the executive European Commission, spokesman Margaritis Schinas told a news conference: "He recalled that decisive progress must be made in time for the October European Council next week and negotiations at the technical level will continue this week."

The 27 EU states will get an update at a meeting of national ambassadors, without Britain, on Friday evening. The sides will continue negotiations through the weekend with hopes for a breakthrough as early as Monday.

The 27 EU leaders meeting next Wednesday and Thursday in Brussels want to be able to announce decisive progress on the Brexit deal to agree to hold another summit in November. That would be to finalise work on a declaration of close future ties with Britain that would also be part of the Brexit package.

"Michel Barnier and his team are working day and night to reach a deal, but we are not there yet," EU Migration Commissioner Dimitris Avramopoulos told the news conference.

In a sign of progress, diplomats in Brussels told Reuters the European Union no longer expected a new proposal from Britain for the Ireland-UK border fix after Brexit as negotiators from both sides were seeking to agree on it in direct talks.

Previously, the 27 states who will remain in the bloc insisted that London present formal new proposals for the border in writing.

The issue of how to avoid extensive checks at the border between EU state Ireland and the British province of Northern Ireland - Britain's only land frontier - after Brexit is the last remaining hurdle, with nearly everything else in the withdrawal agreement, agreed before Britain leaves next March.

NO-DEAL

Both the EU and Britain have signalled progress in recent days, boosting the sentiment in markets, which fear the most damaging no-deal Brexit.

"My feeling is that there is a smaller probability for lack of deal now than we have had for some time," Danuta Hubner, a European Parliament lawmaker dealing with Brexit, told a committee.

But the Commission has also looked at preparations among the 27 states for a no-deal scenario on Wednesday, discussing a document laying out the multiple disruptions that would ensue, including customs checks and duties kicking in immediately on all imports and exports between the EU and Britain.

While some in the Commission wanted to publish the document, the Brexit negotiators feared it would upset Britain and could hurt the negotiations.

"We are working hard for the Brexit negotiations to succeed. But since we can't guarantee the result right now, we have to prepare for all possible outcomes," one diplomat said.

"There is a growing sense among the EU27 that outstanding preparedness questions have to be addressed very quickly and in a detailed way... The EU27 need to be ready on day one to address issues like citizen's rights, transport or customs coherently."

Avramopoulos also said the bloc's no-deal contingency plans on security were driven by "goodwill", stressing the bloc would want to continue cooperating with Britain closely, including on sharing intelligence.